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Bad News for Trump. The US Is In Its Worst Bond Crisis Since Alexander Hamilton Was Leading the Treasury
24/7 Wall St. • • business
Key Points:
- The 10-year Treasury yield reached 5.19% on October 14, 2026, marking the second-longest bond market drawdown in U.S. history, dating back to Alexander Hamilton's era.
- Persistent inflation, with consumer prices rising 3.7% year-over-year in September 2026, and recent Federal Reserve rate hikes have led to falling bond prices, especially for long-term bonds.
- Higher Treasury yields increase the government's interest costs and raise borrowing expenses across the economy, impacting mortgage rates and corporate debt refinancing.
- Long-duration bond funds, such as the iShares 20+ Year Treasury Bond ETF (TLT), have suffered significant losses over the past five years, with TLT down 34.05%, while shorter-duration funds have performed better.
- A bond market recovery depends on inflation easing below current levels and the 10-year yield staying under its recent peak of 5.31%; until then, long bonds remain a risky investment.
